The Price Is A One-Time Thing

Everyone would like to buy low and sell high. The problem is that we never know if the price is high or low until after the fact.  In 1990, a little girl (Let’s call her Kelly, not her real name) was about two years old when I met her parents. At 26, Kelly had a modest income, a small savings account, and a solid credit rating. If we could find a low-priced condo, owning her home was possible for Kelly.  Making a mistake on your first purchase isn’t catastrophic, but its consequences are severe enough to deter many people.  

In 2016, Kelly took a chance buying a two-bedroom, two-bath condo in a previously unsaleable development. I remember Kelly’s hesitation and second-guessing at the closing. With her parent’s support, Kelly moved forward and bought the condo, paying the highest price anyone had paid for a similar unit thus far.  

It’s been said, “Price is a one-time thing. Cost is a lifetime thing.” We think about price one time; that’s when we buy. But the cost of things we buy stays with us forever. Like everyone, Kelly had no idea in 2016 if the price she paid to own the condo had reached its bottom. 

Kelly took care of the property for six years. Twice she considered selling. Both times she decides to hold, passing on the opportunity to sell at a modest profit. Finally, with significant life changes in the works late this summer, Kelly decided to sell. Because she considered all of the advantages of owning over renting, not just the price, Kelly will close on the sale and make a tremendous profit. If Kelly had declined to pay the highest price anyone had paid for a condo in this development when she bought and continued to rent, she would not have turned her tiny downpayment into a substantial cash return. 

Real estate, as an investment, works best if you hold the property for the long term, take advantage of value appreciation, and use depreciation as a tax advantage. The homes we live in are much more than investments. At Essential Real Estate, we have strategies to help our home buyers negotiate offers that may not require you to be the highest bidder to get your offer accepted. For our home selling clients, we show you how to make the system work for you to increase your profit by decreasing your selling expenses. 

We can’t tell you if the market is going up or down. We can give you opportunities to make the market conditions work for you. 

We are available to discuss your plans and show you how to profit in this market.